The ACCC is seeking feedback from businesses and consumers on Australia Post’s draft proposal to increase its basic postage rate by 20 cents from mid-2025.

Australia Post’s proposed change would increase the price of delivering reserved ordinary small letters from $1.50 to $1.70, ordinary large letters (up to 125g) from $3.00 to $3.40, and ordinary large letters (over 125g and under 250g) from $4.50 to $5.10.

Australia Post is also proposing to increase the prices of a range of its other reserved letter services, including the price of priority labels by 30 cents, from $0.70 to $1.00.

Combined with the proposed regular stamp price increase, priority ordinary small letters are proposed to increase by 50 cents, from $2.20 to $2.70. Australia Post is not proposing to increase the price of concession stamps (60 cents each) or stamps for seasonal greeting cards (65 cents).

Australia Post has also indicated that it proposes to submit price notifications to the ACCC for further price increases in July 2026 and July 2027 as part of a future price path for stamped letters.

The ACCC is required to assess the proposed price increase in accordance with the Competition and Consumer Act (CCA) and then notify Australia Post on whether it objects to the proposal.

When assessing the proposed price increase, the ACCC will consider Australia Post’s recovery of efficient costs, including a reasonable rate of return, and how the company’s common costs are allocated to the relevant letter segments. In forming its view, the ACCC will consider the responses received during this consultation period. The ACCC is not assessing these proposed price increases as part of this price notification process. 

“We are seeking views from consumers, businesses, and other stakeholders about Australia Post’s proposed price increase in 2025,” ACCC commissioner, Catriona Lowe said.

“We will then examine the information provided by Australia Post and the feedback received in the context of our role under the legislation.”

VMA calls on Mail Industry Coalition to review impact of proposed increases  

In response to the proposed price increases, the Visual Media Association (VMA) has called the Mail Industry Coalition (MIC) together to review the impact of these proposed price increases on business mail volumes.

Kellie Northwood, CEO of the VMA, told Sprinter the MIC will gather on 2 December to prepare feedback.

“There are many components in the proposed price increases and their proposed forecast increases, whilst welcomed, will need to be firmly locked in, if increases are agreed to be appropriate,” said Northwood.

“The ongoing concern across Australia Post’s request of price increases to the basic postal rate, which impacts business mail, is the inconsistency to the support to reviewed processes and how they are being held to account.

“Essentially, industry has supported alternate days, reduced service levels, product discontinuation and revisions and more, however year on year the business mail forecasts issued by Australia Post appear to stray from volume and costs which then sees their only option is to increase pricing. It defies commercial practice.

“If Australia Post make commitments to pricing based on their operational cost improvement initiatives they should be held to account for it, rather than industry being hit hardest with annual price increases,” said Northwood.

“Whilst VMA have held greater focus on promo and charity mail products due to our member breakdown, there is concern that the highest price increases proposed to pre-sort will lead to volume decreases across the largest letters volume sector. We will be seeking insight into the volume modelling in this regard to understand how this will impact other product pricing in the forecast – this will include contingency forecasts,” furthered Northwood.

“Finally, government cannot stand idle on these matters either, on both sides of politics. The postal service is a fundamental societal service across Australia. From post offices to regional letterbox delivery, equal access to communications and correspondence for all citizens and more.

“Further to any profitability from Australia Post, the broader industry employs some 230,000 Australians contributing to the economy via employment, income taxes, GST and more. All correspondence regarding this matter will be shared with the Minister and Shadow Minister’s Office to ensure there is a deep understanding to all matters at hand as we approach an important election year in 2025,” said Northwood.

Following the consultation process, the ACCC will release a preliminary view on the draft price notification in early 2025. Australia Post may then lodge a formal notification of a price rise with the ACCC.

Consultation on the proposed price increase, including a simple and short survey, is now open and closes on 22 December 2024.

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